1 launch frequent shopper programs 2 offer special customer services 3

1 launch frequent shopper programs 2 offer special

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(1) launch frequent-shopper programs, (2) offer special customer services, (3) personalize the services they provide, and (4) build a sense of community. To deal with unprofitable customers identified by their CRM data, retailers need to develop lower-cost approaches to serve them, or else exclude those customers altogether from the retail offer. Managing the Merchandise Planning Process LO1 Explain the merchandise management organization and performance measures . Merchandise is broken down into categories for planning purposes. Buyers and planners manage these categories, often with the help of their major vendors. The key performance measures used to assess merchandise management are GMROI and its components; sales-to-stock ratio, which is similar to inventory turnover; and gross margin. High inventory turnover is important for a retailer’s financial success. But if the retailer attempts to push inventory turnover to its limit, stockouts and increased costs may result. LO2 Contrast the merchandise management processes for staple and fashion merchandise. Retailers use different types of merchandise planning systems for managing (1) staple and (2) fashion merchandise categories. Staple merchandise categories, also called basic merchandise categories, are categories that are in continuous demand over an extended time period. Fashion merchandise categories are in demand only for a relatively short period of time. New products are continually introduced into these categories, making the existing products obsolete. Seasonal merchandise categories consist of items whose sales fluctuate dramatically depending on the time of year. The steps in the merchandise management planning process are (1) forecast category sales, (2) develop an assortment plan, (3) determine appropriate inventory levels and product availability, (4) develop a plan for managing inventory, (5) allocate merchandise to stores, and (6) monitor and evaluate performance and make adjustments. LO3 Describe how to predict sales for merchandise categories. The first step in merchandise management planning is to develop a forecast for category sales. The approach for forecasting sales of staple merchandise is to project past sales trends into the future, making adjustments for anticipated factors affecting future sales. Forecasting sales for fashion merchandise is challenging because buyers typically need to place orders and commit to buying specific quantities between three and six months before the merchandise will be delivered and made available for sale. Some sources of information that retailers use to develop forecasts for fashion merchandise categories are (1) previous sales data, (2) market research, (3) fashion and trend services, and (4) vendors. LO4 Summarize the trade-offs for developing merchandise assortments. After forecasting sales for the category, the next step in the merchandise management planning process is to develop an assortment plan. An assortment plan is

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